Education Secretary William Bennett and his deputies show signs of premature battle fatigue. Assistant Secretary Chester Finn Jr. {op-ed, Oct. 20} accuses me of creating a villain of his boss "in one op-ed piece after another," including my "latest salvo" in The Post on Oct. 7. He questions why I am so "agitated."

The facts: I have written only twice -- once in reply to Bennett's New York Times article last February, titled "Our Greedy Colleges," and the second time in The Post, responding to Finn's testimony before the House higher education subcommittee, in which he echoed Bennett's claim that our colleges are "underproductive and unaccountable." The assistant secretary reminds me of the town bully who spits in your eye and then complains if you appear a mite riled.

Finn explains the cause for agitation of "Cater and his colleagues in private higher education" by declaring: "What they cannot abide is the possibility that the true cost of a bachelor's degree in a private college -- and it's the cost to the institution we are referring to, not the price charged the tuition-paying consumer -- may actually exceed that of a similar degree from a public institution." He concedes that American higher education is "a swell source of upward mobility. . . . But underaccountable and underproductive -- darned right."

Thus he makes clear why his staff has published a research document titled "Estimating the Cost of a Bachelor's Degree: An Institutional Cost Analysis." Despite what he now admits are "methodological limitations and data constraints," it purports to reveal excessive costs among the private colleges that contribute to higher tuitions. This "pioneering study" ignores similar scholarly research conducted in at least two states that contradicts its findings. But it seeks to sustain Bennett's accusation last February that, "if anything, increases in financial aid in recent years have enabled colleges and universities blithely to raise their tuitions, confident that federal loan subsidies would help cushion the increase." Bennett quoted approvingly his allegation at Harvard's 350th anniversary ceremony that "too many students fail to receive the education they deserve" and declared that "Stanford University's vague justification for increased charges -- 'new knowledge is inherently more expensive' -- only underscores the lack of focus and purpose at some of our nation's most prestigious universities."

We get nowhere by lumping all of higher education into a single econometric model designed to measure performance and productivity. Bennett ignores three rather distinct groupings among the independent undergraduate institutions. A sizable number charge below $5,000 in tuition, serve a limited geographic constituency and wage a hard-scrabble struggle for survival. A comparative few -- the Ivies and the blue chips -- charge $12,000 and upward. Bennett attended one of those and directs his ire against them. Indeed, they do recall JFK's homily that life is unfair, for they enjoy the biggest endowments, the highest annual giving and the longest lines of freshman applicants. People who drive Cadillacs and Mercedeses don't quibble over price tags. To their credit, most of these elite colleges devote ever larger sums to student aid to avoid becoming havens for the rich.

By far the largest middle tier of institutions charge tuitions ranging between $7,000 and $10,000, and some of us get listed as "Best Buys in College Education." At Washington College, we are devoutly cost and price conscious. A three-member committee of our board monitors monthly income and outgo to stay within budget. Each year, we set ever higher goals for annual donations by alums and friends to cover at least one of three dollars in operating costs. We squeeze the optimum return from our modest endowment. Solicitation of special grants and gifts pays for the major capital costs of refurbishing historic buildings and erecting new science labs. Only after we have made these calculations do we set tuition for the year ahead.

Why am I agitated? After experience in the LBJ White House as midwife for legislative programs to extend higher education to many more Americans, I foresee danger in Secretary Bennett's promiscuous shooting from the hip at private institutions. We thrive amid lusty criticisms. But we do not need a political overlord who instructs us on values and productivity. We are far more accountable -- to our students, trustees and patrons -- than he appears to be.

Noting my congressional testimony, Bennett's deputy, Bruce Carnes, has now asked Washington College to participate as a case study for the Education Department's investigation of cost-control strategies. My initial response has been to send him a five-year review presented to our board of trustees in early October. In 1982, Cambridge Associates of Boston, independent analysts, conducted an intensive financial examination of the college and projected unmanageable deficits by 1987 unless we undertook 10 urgent correctives -- including tuition increases. Adopting this regimen, I was able to report to the trustees a balanced budget for fiscal 1987 as well as a condition of "financial equilibrium."

My reply to Deputy Undersecretary Carnes offered our help in his endeavor, but concluded: "I do not hold a high degree of confidence that your boss is interested in getting at the financial predicament of higher education. Otherwise, why would he deliver his harsh verdicts before he makes a serious effort at inquiry?"

-0The writer is president of Washington College in Chestertown, Md.